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Chinese megadeal in sporting goods

The leading Chinese sporting goods brand Anta Sports (FY2018 rev: €545m, rising 44% YoY) acquires the giant Finnish sports equipment maker Amer Sports (FY2018 rev: €2,7bn), in a deal valued at c. €4.6bn. This transaction is backed by an international buyout consortium and is expected to be completed by Q2/2019. Under the deal, Anta acquires 58% of Amer, while other investors in the consortium are reported to include the Hong Kong-based private equity fund FountainVest (21.3%) and the Canadian billionaire Chip Wilson, founder of yoga apparel company Lululemon (20.6%).

Amer Sports: A Finnish sporting goods company listed on the Nasdaq Helsinki stock exchange with a number of leading brands, including Salomon, Arc’teryx, Peak Performance, Atomic, Mavic, Suunto, Wilson and Precor. Founded in 1950, the company began life as a tobacco manufacturer & distributor, but has since evolved into a multinational company devoted to the production of sporting goods. The Group’s business is balanced by its broad product portfolio, as well as by a presence in all major global markets.

Anta Sports: China’s largest sporting goods brand (and the third-largest in the world by market capitalization, after Nike and Adidas). Its high-growth brand ‘Anta’ focuses on athletic footwear & apparel products, catering to lower and middle-income groups. In addition, Anta Sports is a leading sports retailer in China, with 11,316+ brick & mortar stores. The company is pursuing a multi-brand and onmi-channel strategy – broadening its customer base through acquisitions of high-end international sportswear brands that leverage sales in its home markets.

Deal delivers:

Extends Anta’s overseas reach, fulfilling a core strategy to grow by acquiring established international brands that complement the Chinese home market: 43% of Amer’s sales are in EMEA, 43% in the Americas, but just 14% in Asia Pacific.

Expands Anta’s scale in a bid to challenge the market leaders Nike & Adidas, both in its home market and also internationally (there are plans to launch the Anta brand in Europe in 2019).

Distribution scale in the Chinese market, where Anta has 11,316 retail stores and a large portfolio of brands positioned across the mass market to high-end market spectrum. Amer has already enjoyed strong growth in China over the last five years – its sales there have grown at CAGR5YR of 29%, and represented 6% of sales in 2018.

Reduces debt: the consortium will pay down EUR1 billion euros in debt from Amer Sports.

“Through our multi-brand strategy, we aspire to become a competitive, global, multi-brand company with newly added brands. To that end, we are launching our globalization strategy in 2018. Through product innovation and R&D investment. We will tap into the global market with our best brands.” Ding Shizhong, Anta’s chairman and CEO.

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